KUALA LUMPUR (Feb 7): Serba Dinamik Holdings Bhd has been ordered by the High Court to reveal the fact-finding update (FFU) by Ernst & Young Consulting Sdn Bhd (EY Consulting), which was appointed to conduct a special independent review (SIR) on the public-listed company.

This is an order that demands Serba Dinamik to make a public announcement of the FFU of EY Consulting following its SIR pursuant to paragraph 2.23(1) of the Main Market Listing Requirements (MMLR) within two market days from the date of this order. This means that Serba Dinamik will have to reveal the FFU by Wednesday (Feb 9).

With the decision by Judicial Commissioner Wan Muhammad Amin Wan Yahya, the court said it is empowered to grant reliefs sought by Bursa Malaysia Securities Bhd, which had filed the application against Serba Dinamik under Section 360 of the Capital Market and Services Act 2007 (CMSA).

"The information sought to be announced [in the FFU] is material and does not depend whether it is true, false or conclusive. The defendant (Serba Dinamik) is entitled to disagree with the information to be disclosed.

"Bursa is entitled under Section 11 of CMSA to give the directive in order to uphold and maintain a fair and orderly securities market to safeguard public and investors' interests as well as take the appropriate action under the MMLR for the purpose of monitoring and ensuring compliance of MMLR," Wan Muhammad Amin said.

"In the circumstances, the court allows Enclosure 1 (the application by Bursa Malaysia [for Serba Dinamik] to be compel to reveal the FFU)," he said, adding the court is also dismissing Serba Dinamik's application to expunge parts of Bursa's affidavit which relate to the FFU.

Wan Muhammad Amin ruled that EY Consulting falls within the term of a "special auditor", a claim which had been disputed by Serba Dinamik.

"It is clear to me that the function of the special auditor under paragraph 2.24 is to review and to investigate the affairs of the listed issuer or any subsidiaries or both.

"The issue of confidentiality is a private matter between Serba Dinamik and EY and cannot override Bursa Malaysia's right as a statutory body to have the findings disclosed," the judicial commissioner added.

The proceedings in chambers were conducted over video with no access for the media.

Last November, Bursa filed an originating summons to compel Serba Dinamik to disclose the FFU of the special independent review dated Sept 30, 2021 conducted by EY Consulting.

The legal action was taken as Serba Dinamik's "failure to comply" with the stock exchange's directive for the disclosure. The company claimed that there was no material information to be disclosed.

Subsequently, Serba Dinamik sued EY Consulting and the company sought to restrain the latter from sharing any findings or opinions on it.

Serba Dinamik sought declaration that EY Consulting had misrepresented that it could be appointed to conduct the review, following a directive by Bursa Malaysia, and that its appointment was void ab initio or had no legal effect from the start.

Serba Dinamik also contended that EY Consulting "lacked independence" as its affiliate served as Bursa Malaysia's auditor.

The hearing of the lawsuit between Serba Dinamik and EY Consulting will start on Tuesday (Feb 8).

Serba Dinamik's lawyers, led by Mak Lin Kum, however, applied for stay of proceedings and redaction of the documents.

Subsequent to that, Bursa Malaysia's counsel Datuk Loh Siew Cheang objected to the stay application as this was a matter of public importance and it had already been decided by the court.

"There should be no stay. I do not think it is appropriate, in the special nature of this case. As it stands, it has been nearly one year that they have put us (Bursa Malaysia) through this."

With this, Wan Muhammad Amin said the court would not grant (an oral) application for a stay.

"But you are entitled to file a formal [written] application and we will take it from there," the judicial commissioner added.

To recap, the Securities Commission Malaysia (SC) in late December last year charged Serba Dinamik and its officers, including its controlling shareholder Datuk Dr Mohd Abdul Karim Abdullah who is also the company's managing director, for submitting a false statement to the local stock exchange.

The charges came after the SC conducted an investigation into the oil and gas company, which has also ventured into the renewable energy sector, following the company's former auditor KPMG raising red flags on its financial accounts for the 12-month period ended Dec 31, 2020, in May last year.

Since the audit issues were made public, Serba Dinamik has taken legal actions against its former auditor KPMG, Bursa Malaysia and EY Consulting.